Suppose that during 2016, the market for ZP98 grew 8%. All increases in market share (that is, sales increases greater than 8%) are the result of Dransfield's strategic actions.

In Exercise 13-31

Required
Calculate how much of the change in operating income from 2015 to 2016 is due to the industry market-size factor, product differentiation, and cost leadership. How does this relate to Dransfield's strategy and its success in implementation? Explain.

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2015 2016 1a. Units of ZP98 produced and sold 1b. Units of ZP98 returned 1c. Net sales in units 2. Selling price 3. 5,000 500 4,500 6,250 225 6,025 $50 3,125 Direct materials (kilograms) used 4. Direct materials cost per kilogram 5. Manufacturing capacity in units of ZP98 6. Total conversion costs 7.Conversion cost per unit of capacity 8. Selling and customer-service capacity 9. Total selling and customer-service costs 10. Selling and customer-service capacity cost per customer 11. Advertising staff 12. Total advertising costs 13. Advertising cost per employee 2,500 8,000 $128,000 8,000 $184,000 S23 60 customers S4,180 S69.67 60 customers $4,000 S6667 $20,000 $20,000 24,000 24,000